Ceigall India IPO

Ceigall India IPO (initial public offering) is set to open for subscription on August 1, 2024 and will close on August 5, 2024. Below is a breakdown of the infrastructure company's strengths, weaknesses and growth prospects to help investors make an informed decision. Ceigall India IPO in a nutshell Quality: Between FY22-24, Ceigall India reported a three-year average ROE and ROCE of 30.3 and 30.2 per cent, respectively. Growth: During FY22-24, its revenue and net profit grew by 63.5 and 56 per cent per annum, respectively. Valuation: Ceigall India's stock will trade at a P/E and a P/B of 22.8 and 4.4 times, respectively. Overview: The growing focus of the government on infrastructure development, particularly roads and railways, should help Ceigall India get consistent orders and scale up its business. However, factors such as cyclicality and price-based competition from both large and small players can pose a threat to the company's growth. About Ceigall India Ceigall India is an infrastructure construction company that was incorporated in the year 2002. It is known for undertaking specialised construction work such as elevated roads, expressways, flyovers, highways, runways and tunnels. The company got its first major order in 2006, when it bagged a project worth Rs 6.3 crore for the Punjab Public Works Department. The engineering, procurement and construction (EPC) segment is the largest revenue generator for the company, constituting 66 per cent of its total revenue share in FY24, followed by the hybrid annuity model (HAM) segment at 26 per cent. Strengths of Ceigall India Healthy order book value: Presently, Ceigall India has around 18 ongoing projects with a total order book value of Rs 9,471 crore (3.12 times of FY24 revenue). Such sizable numbers provide healthy revenue visibility and solid growth prospects for the company. Weaknesses of Ceigall India High revenue concentration: Ceigall India's revenue is concentrated among a handful of regions, with around 50 per cent of its FY24 revenue coming only from Punjab. Thus, any political or environmental disruption in the state may affect the company's financials. Negative cash flows: Ceigall India's cash flow from operations have been in the red over the last three years owing to high receivables. Ceigall India IPO details Total IPO size ( Rs cr) 1,253 Offer for sale (Rs cr) 568 Fresh Issue (Rs cr) 684 Price Band (Rs) 380-401 Subscription dates August 1-5, 2024 Purpose of issue Repayment of debt Post-IPO M-cap (Rs cr) 6,985 Net worth (Rs cr) 1,572 Promoter holding (%) 82.1 Price/earnings ratio (P/E) 22.8 Price/book value (P/B) 4.4 Financial history Key financials (Rs Cr) 2Y growth (% pa) FY24 FY23 FY22 Revenue 63.